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BHPBill - sale of onshore US assets
BHP today, 27 July 2018, announced that it has entered into agreements for the sale of its entire interests in the Eagle Ford, Haynesville, Permian and Fayetteville Onshore US oil and gas assets for a combined base consideration of USD10.8 billion, payable in cash.
BP American Production Company, a wholly owned subsidiary of BP Plc, has agreed to acquire 100% of the issued share capital of Petrohawk Energy Corporation, the BHP subsidiary which holds the Eagle Ford, Haynesville and Permian assets, for a consideration of USD10.5 billion (less customary completion adjustments). One-half of the consideration is payable at completion, with the balance (deferred consideration) being payable in six equal instalments over a six month period, the first instalment to be paid one month after completion. Payment of the deferred consideration is not subject to any conditions.
MMGJ Hugoton III, LLC, a company owned by Merit Energy Company, has agreed to acquire 100% of the issued share capital of BHP Billiton Petroleum (Arkansas) Inc and 100% of the membership interests in BHP Billiton Petroleum (Fayetteville) LLC, which hold the Fayetteville assets, for a total consideration of USD0.3 billion (less customary completion adjustments), payable at completion.
Both sales are subject to the satisfaction of customary regulatory approvals and conditions precedent, and we expect completion to occur by the end of October 2018. The effective date at which the right to economic profits would transfer to the purchasers is 1 July 2018.
BHP expects to recognise an impairment charge of approximately USD2.8 billion post- tax (or approximately USD2.9 billion pre-tax) against the carrying value of its Onshore US assets. The impairment charge will be recognised as an exceptional item in the results for the 2018 financial year.
BHP anticipates that the estimated income tax expense from the transactions will be approximately USD0.2 billion, and that the estimated cash tax payable will be less than USD0.1 billion after utilisation of carried forward tax losses held by the BHP US tax consolidated group.
BHP will continue to operate the assets until completion and will work closely with the purchasers to ensure a smooth transition of ownership.
In addition to the demerger of South32, BHP has announced or completed more than USD18 billion of divestments over the last six years.
Further information on BHP can be found at: www.bhp.com.
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BHPBill - defense of Samarco Class Action
BHPBill noted the media reports concerning the Australian class action in relation to the Samarco dam failure.
BHPBill confirms it has been served with a class action proceeding filed in the Federal Court of Australia in Victoria.
BHPBill intends to defend the claim.
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